Impact of Non-GAAP Adjustments on Forward Looking Diluted Net Income Per Share

(Unaudited)

Three Months Ending

Year Ending

September 27, 2014

January 3, 2015

Forecast

Forecast

Diluted net income per share on a GAAP basis

$0.13 to $0.15

$0.48 to $0.56

Amortization of acquired intangibles

0.05

0.20

Stock-based compensation expense

0.07

0.27

Non-qualified deferred compensation expenses

-

0.01

Acquisition and integration-related costs

0.02

0.08

Special charges*

-

0.03

Amortization of debt discount

0.01

0.06

Other income or expense related to investments and non-qualified

deferred compensation plan assets**

-

(0.02)

Income tax effect of non-GAAP adjustments

(0.05)

(0.21)

Diluted net income per share on a non-GAAP basis

$0.23 to $0.25

$0.90 to $0.98

* Comprised of costs related to a voluntary retirement program

** Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on sale of investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense.

Cadence Design Systems, Inc.

As of July 21, 2014

Impact of Non-GAAP Adjustments on Forward Looking Net Income

(Unaudited)

Three Months Ending

Year Ending

September 27, 2014

January 3, 2015

($ in millions)

Forecast

Forecast

Net income on a GAAP basis

$41 to $47

$147 to $172

Amortization of acquired intangibles

16

60

Stock-based compensation expense

21

83

Non-qualified deferred compensation expenses

-

3

Acquisition and integration-related costs

5

25

Special charges*

-

10

Amortization of debt discount

4

18

Other income or expense related to investments and non-qualified

deferred compensation plan assets**

-

(5)

Income tax effect of non-GAAP adjustments

(16)

(66)

Net income on a non-GAAP basis

$71 to $77

$275 to $300

* Comprised of costs related to a voluntary retirement program

** Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on sale of investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense.